WILLMAR -- A rural hospital consortium is urging area seniors interested in signing up for a Medicare Advantage health plan to first find out whether their local hospital participates in the plan.
Most of the region's small hospitals don't have signed contracts yet with the insurance companies that offer Medicare Advantage products, and hence don't know how they'll be paid for providing hospital care.
Seniors shouldn't be alarmed but should be aware that payment may be an issue for these hospitals, said Deb Ranallo, executive director of Medi-Sota Inc.
"It's a concern for the region," she said. "We want the public to be informed."
The Medi-Sota consortium is made up of 30 hospitals and long-term care facilities in southwestern and west-central Minnesota.
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The Medicare Modernization Act of 2003 opened the way for private insurance companies to begin offering Medicare health plans. The plans, known as Medicare Advantage, in theory will give people more options than traditional Medicare and allow them to buy additional coverage that would otherwise require a supplemental plan. Medi-Sota's member hospitals are aware that Medicare Advantage plans are being marketed in the region, said Frank Lawatsch, president of the consortium and administrator at the Swift County-Benson Hospital.
It's not clear how many people are signing up for Medicare Advantage, he said. "A lot of what we've heard is anecdotal. We have no idea what the effect of that marketing is."
The consortium's member hospitals want the public to know, however, that there's nothing in place yet to ensure the hospitals will be adequately paid for services provided through a Medicare Advantage plan.
"We don't want that assumption being made," Lawatsch said.
The majority of Medi-Sota's small rural hospitals are designated as Critical Access Hospitals, which allows them to receive 101 percent reimbursement of their costs from the traditional Medicare program.
It's unclear whether the Medicare Advantage plans will pay the same level of reimbursement.
At some point, payer contracts will likely be offered, Lawatsch said. "We're anticipating that. We're going to absolutely have some contracts."
If payment rates are too low, though, some of the smaller hospitals may opt against participating in some of the Medicare Advantage plans being offered -- and those subscribers might not be covered at their local hospital, Medi-Sota officials said.
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It's an issue for small rural hospitals because Medicare patients usually account for more than half of their admissions. Most of these hospitals already operate on a slim margin and may not be able to absorb further losses from reduced Medicare Advantage payments.
Medi-Sota is urging people to check with their local hospital before enrolling in a Medicare Advantage plan.
"They plan to work with patients as much as possible. They're going to be as helpful as they can," Ranallo said.
Some hospitals are accepting Medicare Advantage in the interim, but may not continue to do so in the future if reimbursement turns out to be too low. Consumers also should be aware that even if their physician accepts Medicare Advantage, their local hospital might not.
Seniors who enroll in Medicare Advantage can revert to traditional Medicare coverage within one year, but might not be able to obtain their previous Medicare supplemental coverage.
